In its submission to Treasury’s review of the TPB, the FPA said giving financial advice had become “almost an unworkable proposition” in the last 10 years due to the imposition of layer upon layer of new regulations and the lack of communication between relevant regulators.
“Financial planners… must comply with four laws which are then regulated by seven different regulators, subject to complaints handling and disciplinary interpretations by three different bodies, and subject to authorisation, supervision and monitoring by a licensee,” the association said.
“[Due to] the lack of consultation and agreement between all these entities on a set of minimum standards under which the provision of financial advice is able to operate under, the outcome has been a significant amount of duplication and additional cost created by this unworkable regulatory environment.”
Given this, the FPA suggested Treasury review the TPB’s regulatory framework for overlap with other relevant regulatory bodies, as well as consider a broader inquiry into regulatory duplication when it came to the provision of financial advice.
“Noting Treasury is generally responsible for most of the laws and regulators involved in regulating the conduct of financial planners, we would hope that Treasury would consider more broadly making recommendations on how to improve this situation,” the association said.
“Our overarching recommendation therefore is that Treasury recommend that the Productivity Commission, the Australian Law Reform Council, or as part of the financial services royal commission recommendation 2.3, review of measures to improve the quality of advice, consider these issues to ensure the broader regulation of financial advice providers is streamlined and there is a removal of much of the regulatory duplication and inefficiency which pervades the profession currently.”
The comments echo recent calls from the joint accounting bodies and the SMSF Association for government action around the complicated regulatory framework governing financial advice, particularly as it affects access to advice for SMSF trustees.
Announcing the intention of the three major accounting bodies to lobby the government jointly for reduced red tape for accountants wishing to provide advice, IPA chief executive Andrew Conway said the extent of the regulatory burden facing advice practitioners meant financial advice was becoming less accessible for consumers over time.
“Our shared goal is to reduce the regulatory burden for our members so we retain financial advisers in the industry. For the first time in the best part of two decades, we are at risk of creating an advice gap in the market,” Mr Conway said earlier this month.
“We have a clear focus to revisit definitions, licensing regimes, and to harmonise obligations when members operate under multiple regulatory frameworks to provide the one piece of advice.”
